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Originally dubbed "Project Reality". At the time, this project was considered very important, as around that time it was believed by many that CD's were the future of gaming. Nintendo's official reasoning for this was to eliminate the load times found in other systems that used the CD format.

The Nintendo 64 was competing against the PlayStation (birthed from a brief alliance Sony had with Nintendo when they were planning a CD-ROM adapter for the SNES) and the SEGA Saturn, both of which played CD-ROM games exclusively. Both this system and the PlayStation were supported by major third-party developers and publishers, though not many games were released for the Nintendo 64 by comparison due to its use of the cartridge format, and those that were released suffered certain deletion of elements such as the use of CD-quality audio that appeared in the PlayStation versions. The loss of Square's support for Nintendo consoles with the Nintendo 64's release, resulting in Final Fantasy VII appearing on the PlayStation instead, proved to be a damaging blow to both Nintendo and its dedicated fan base.

The Nintendo 64 was released in mid-1996 as Nintendo's front-runner in the original next-gen console wars. Although it was a much higher powered machine than the PlayStation or the SEGA Saturn, the Nintendo 64 always lagged behind in sales. Nintendo chose to sell the machine on the merits of its fast-loading cartridge system and the fact that it featured a 64-bit architecture - unfortunately for Nintendo, people were more impressed by high-capacity CD media, in-game movie sequences and pre-recorded soundtracks than fast loading and the size of the machine's memory addressing capabilities, which translated into bigger sales figures for Sony and SEGA, although SEGA were hampered due to consumer and developer mistrust over the 32X. Developers often preferred the Playstation for their titles due to the Nintendo 64's inability to provide media-rich content.

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